Air Lease Corporation Announces Fourth Quarter & Fiscal Year 2023 Results
- Record revenues and profits achieved in Q4 and full-year 2023.
- Net income increased by 56% in Q4, reaching $210.6 million.
- Revenues grew by 19% to $716.6 million in Q4.
- Total assets exceeded $30 billion for the first time in 2023.
- Commercial aircraft supply/demand remains favorable with a $22 billion forward orderbook.
- None.
Insights
The reported financial results by Air Lease Corporation (ALC) for the fourth quarter and full year of 2023 demonstrate significant growth, with a 56% increase in net income and a 19% rise in revenues for Q4 and similar growth patterns for the entire year. This performance is particularly notable given the challenging economic conditions that have affected many sectors. ALC's ability to exceed $30 billion in total assets for the first time reflects a robust business model and strategic asset management, which is likely to instill confidence in investors and analysts monitoring the aviation leasing industry.
ALC's forward orderbook of $22 billion, scheduled for delivery over the next 4-5 years, suggests a strong future revenue stream. The company's strategy of securing 100% of their committed orderbook on long-term leases through the end of 2025 and 65% through 2028 demonstrates prudent risk management and a clear demand for their assets. The $31.0 billion in committed minimum future rental payments further solidifies the company's revenue forecasts. However, the reliance on future market conditions remaining favorable is a point of potential vulnerability, particularly in an industry as volatile as commercial aviation.
ALC's performance in the aircraft leasing sector can be attributed to a combination of strategic fleet growth, successful aircraft sales and effective end-of-lease management. The company has capitalized on the commercial aircraft supply/demand dynamics, which have remained favorable despite broader economic uncertainties. This has allowed ALC to achieve a net book value of $26.2 billion for their fleet, a notable increase from the previous year.
Investors should be aware of the potential risks associated with regional market fluctuations. ALC's portfolio shows a significant concentration in the Asia Pacific and Europe, representing 39.8% and 37.7% of the net book value, respectively. While this diversification strategy can mitigate risks, geopolitical tensions or economic downturns in these regions could impact ALC's performance. Additionally, the company's ability to navigate the post-pandemic recovery of the aviation sector and adjust to shifts in airline demand will be critical for maintaining growth momentum.
ALC's financial results reflect the successful settlement of insurance claims related to the Russian fleet, with a net benefit of approximately $67 million. This outcome not only demonstrates ALC's ability to effectively manage international legal complexities but also mitigates the substantial write-off from the previous year. The resolution of such claims provides a clearer financial picture moving forward and reduces uncertainty for stakeholders.
However, it is important to note that the aviation leasing industry is subject to complex international legal and regulatory environments. ALC's continued success will depend on its capacity to navigate these challenges, including compliance with international aviation regulations, tax laws and insurance requirements. The company's proactive management of these legal aspects is crucial for maintaining operational stability and investor confidence.
“Fourth quarter and full-year performance at ALC was very strong. With the exception of the benefit of tax reform in 2017, we achieved record revenues and profits for the 4th quarter, with net income increasing
Fourth Quarter and Fiscal Year 2023 Results
The following table summarizes our operating results for the three months and year ended December 31, 2023 and 2022 (in millions, except per share amounts and percentages):
Operating Results
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||||||||||
|
2023 |
|
2022 |
|
$ change |
|
% change |
|
2023 |
|
2022 |
|
$ change |
|
% change |
||||||||||||||
Revenues |
$ |
716.6 |
|
|
$ |
601.6 |
|
|
$ |
115.0 |
|
|
19.1 |
% |
|
$ |
2,685.0 |
|
|
$ |
2,317.3 |
|
|
$ |
367.7 |
|
|
15.9 |
% |
Operating expenses |
|
(517.2 |
) |
|
|
(452.3 |
) |
|
|
(64.9 |
) |
|
14.3 |
% |
|
|
(1,998.4 |
) |
|
|
(1,684.6 |
) |
|
|
(313.8 |
) |
|
18.6 |
% |
(Write-off) of Russian fleet, net of recoveries |
|
67.0 |
|
|
|
30.9 |
|
|
|
36.1 |
|
|
116.8 |
% |
|
|
67.0 |
|
|
|
(771.5 |
) |
|
|
838.5 |
|
|
— |
% |
Income/(loss) before taxes |
|
266.4 |
|
|
|
180.2 |
|
|
|
86.2 |
|
|
47.8 |
% |
|
|
753.6 |
|
|
|
(138.8 |
) |
|
|
892.4 |
|
|
— |
% |
Net income/(loss) attributable to common stockholders |
$ |
210.6 |
|
|
$ |
134.9 |
|
|
$ |
75.7 |
|
|
56.1 |
% |
|
$ |
572.9 |
|
|
$ |
(138.7 |
) |
|
$ |
711.6 |
|
|
— |
% |
Diluted earnings/(loss) per share |
$ |
1.89 |
|
|
$ |
1.21 |
|
|
$ |
0.68 |
|
|
56.2 |
% |
|
$ |
5.14 |
|
|
$ |
(1.24 |
) |
|
$ |
6.38 |
|
|
— |
% |
Adjusted net income before income taxes(1) |
$ |
213.9 |
|
|
$ |
158.2 |
|
|
$ |
55.7 |
|
|
35.2 |
% |
|
$ |
733.6 |
|
|
$ |
659.9 |
|
|
$ |
73.7 |
|
|
11.2 |
% |
Adjusted diluted earnings per share before income taxes(1) |
$ |
1.92 |
|
|
$ |
1.42 |
|
|
$ |
0.50 |
|
|
35.2 |
% |
|
$ |
6.58 |
|
|
$ |
5.89 |
|
|
$ |
0.69 |
|
|
11.7 |
% |
Key Financial Ratios
Three Months Ended
|
Year Ended
|
||||||
|
2023 |
2022 |
2023 |
2022 |
|||
Pre-tax margin |
|
|
|
(6.0)% |
|||
Adjusted pre-tax margin(1) |
|
|
|
|
|||
Pre-tax return on common equity (trailing twelve months) |
|
|
|
(3.0)% |
|||
Adjusted pre-tax return on common equity (trailing twelve months)(1) |
|
|
|
|
|
||
—————————————————————— |
||
(1) |
Adjusted net income before income taxes, adjusted diluted earnings per share before income taxes, adjusted pre-tax margin and adjusted pre-tax return on common equity have been adjusted to exclude the effects of certain non-cash items, one-time or non-recurring items, such as net write-offs and recoveries of our Russian fleet, that are not expected to continue in the future and certain other items. See note 1 under the Consolidated Statements of Operations included in this earnings release for a discussion of the non-GAAP measures and a reconciliation to their most comparable GAAP financial measures. |
|
Highlights
-
During the fourth quarter, we took delivery of 22 aircraft from our order book, representing approximately
$1.2 billion $30 billion -
We recognized a net benefit of approximately
$67 million -
Sold eight aircraft1 during the fourth quarter for approximately
$440 million -
We have
$1.5 billion $605 million $892 million -
We have placed
100% of our committed orderbook on long-term leases for aircraft delivering through the end of 2025 and have placed approximately65% of our entire orderbook delivering through 2028. -
We ended the year with
$31.0 billion $16.4 billion $14.6 billion -
In 2023, we raised approximately
$3.6 billion $6.8 billion -
On February 13, 2024, our board of directors declared a quarterly cash dividend of
$0.21 $0.21
Financial Overview
Fourth Quarter 2023 vs. Fourth Quarter 2022
Our total revenues for the three months ended December 31, 2023 increased by
Our net income attributable to common stockholders for the three months ended December 31, 2023 was
Adjusted net income before income taxes during the three months ended December 31, 2023 was
Full Year 2023 vs. Full Year 2022
Our total revenues for the year ended December 31, 2023 increased by
Our net income attributable to common stockholders for the year ended December 31, 2023 was
Adjusted net income before income taxes during the year ended December 31, 2023 was
—————————————————————— |
1 Aircraft sales include one sales-type lease transaction and two sales-type lease transactions during the quarter and year ended December 31, 2023, respectively. During the quarter and year ended December 31, 2022, aircraft sales includes one sales-type lease transaction and nine sales-type lease transactions, respectively. |
Flight Equipment Portfolio
As of December 31, 2023, the net book value of our fleet increased to
The following table summarizes the key portfolio metrics of our fleet as of December 31, 2023 and December 31, 2022:
|
December 31, 2023 |
|
December 31, 2022 |
||
Net book value of flight equipment subject to operating lease |
$ |
26.2 billion |
|
$ |
24.5 billion |
Weighted-average fleet age(1) |
|
4.6 years |
|
|
4.5 years |
Weighted-average remaining lease term(1) |
|
7.0 years |
|
|
7.1 years |
|
|
|
|
|
|
Owned fleet(2) |
|
463 |
|
|
417 |
Managed fleet |
|
78 |
|
|
85 |
Aircraft on order |
|
334 |
|
|
398 |
Total |
|
875 |
|
|
900 |
|
|
|
|
|
|
Current fleet contracted rentals |
$ |
16.4 billion |
|
$ |
15.6 billion |
Committed fleet rentals |
$ |
14.6 billion |
|
$ |
15.8 billion |
Total committed rentals |
$ |
31.0 billion |
|
$ |
31.4 billion |
|
|
|
|
||
(1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease. |
|||||
(2) As of December 31, 2023, our owned fleet count included 14 aircraft classified as flight equipment held for sale and 12 aircraft classified as net investments in sales-type leases, which are both included in Other assets on the Consolidated Balance Sheet. |
|||||
The following table details the regional concentration of our flight equipment subject to operating leases:
|
December 31, 2023 |
|
December 31, 2022 |
||
Region |
% of Net Book Value |
|
% of Net Book Value |
||
|
39.8 |
% |
|
44.1 |
% |
|
37.7 |
% |
|
32.5 |
% |
|
9.0 |
% |
|
7.8 |
% |
The |
7.9 |
% |
|
9.3 |
% |
|
5.6 |
% |
|
6.3 |
% |
Total(1) |
100.0 |
% |
|
100.0 |
% |
|
|
|
|
||
(1) As of December 31, 2022, we had four aircraft classified as held for sale with a carrying value of |
|||||
The following table details the composition of our owned fleet by aircraft type:
|
|
December 31, 2023 |
|
December 31, 2022 |
||||||
Aircraft type |
|
Number of
|
|
% of Total |
|
Number of
|
|
% of Total |
||
Airbus A220-100 |
|
2 |
|
0.4 |
% |
|
— |
|
— |
% |
Airbus A220-300 |
|
13 |
|
2.8 |
% |
|
4 |
|
1.0 |
% |
Airbus A319-100 |
|
1 |
|
0.2 |
% |
|
1 |
|
0.2 |
% |
Airbus A320-200 |
|
28 |
|
6.0 |
% |
|
28 |
|
6.7 |
% |
Airbus A320-200neo |
|
25 |
|
5.4 |
% |
|
23 |
|
5.5 |
% |
Airbus A321-200 |
|
23 |
|
5.0 |
% |
|
23 |
|
5.5 |
% |
Airbus A321-200neo |
|
95 |
|
20.6 |
% |
|
78 |
|
18.7 |
% |
Airbus A330-200(1) |
|
13 |
|
2.8 |
% |
|
13 |
|
3.1 |
% |
Airbus A330-300 |
|
5 |
|
1.1 |
% |
|
5 |
|
1.2 |
% |
Airbus A330-900neo |
|
23 |
|
5.0 |
% |
|
16 |
|
3.8 |
% |
Airbus A350-900 |
|
14 |
|
3.0 |
% |
|
13 |
|
3.1 |
% |
Airbus A350-1000 |
|
7 |
|
1.5 |
% |
|
6 |
|
1.4 |
% |
Boeing 737-700 |
|
3 |
|
0.6 |
% |
|
4 |
|
1.0 |
% |
Boeing 737-800 |
|
73 |
|
15.8 |
% |
|
82 |
|
19.7 |
% |
Boeing 737-8 MAX |
|
52 |
|
11.2 |
% |
|
47 |
|
11.3 |
% |
Boeing 737-9 MAX |
|
29 |
|
6.3 |
% |
|
15 |
|
3.7 |
% |
Boeing 777-200ER |
|
1 |
|
0.2 |
% |
|
1 |
|
0.2 |
% |
Boeing 777-300ER |
|
24 |
|
5.2 |
% |
|
24 |
|
5.8 |
% |
Boeing 787-9 |
|
25 |
|
5.4 |
% |
|
27 |
|
6.5 |
% |
Boeing 787-10 |
|
6 |
|
1.3 |
% |
|
6 |
|
1.4 |
% |
Embraer E190 |
|
1 |
|
0.2 |
% |
|
1 |
|
0.2 |
% |
Total(2) |
|
463 |
|
100.0 |
% |
|
417 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
||
(1) As of December 31, 2023, aircraft count includes two Airbus A330-200 aircraft classified as freighters. |
||||||||||
(2) As of December 31, 2023, our owned fleet count included 14 aircraft classified as flight equipment held for sale and 12 aircraft classified as net investments in sales-type leases, which are both included in Other assets on the Consolidated Balance Sheet. |
||||||||||
Debt Financing Activities
We ended the fourth quarter of 2023 with total debt financing, net of discounts and issuance costs, of
As of the end of the periods presented, our debt portfolio was comprised of the following components (dollars in millions, except percentages):
|
December 31, 2023 |
|
December 31, 2022 |
||||
Unsecured |
|
|
|
||||
Senior unsecured securities |
$ |
16,330 |
|
|
$ |
17,095 |
|
Term financings |
|
1,628 |
|
|
|
583 |
|
Revolving credit facility |
|
1,100 |
|
|
|
1,020 |
|
Total unsecured debt financing |
|
19,058 |
|
|
|
18,698 |
|
Secured |
|
|
|
||||
Export credit financing |
|
205 |
|
|
|
11 |
|
Term financings |
|
101 |
|
|
|
114 |
|
Total secured debt financing |
|
306 |
|
|
|
125 |
|
|
|
|
|
||||
Total debt financing |
|
19,364 |
|
|
|
18,823 |
|
Less: Debt discounts and issuance costs |
|
(181 |
) |
|
|
(182 |
) |
Debt financing, net of discounts and issuance costs |
$ |
19,183 |
|
|
$ |
18,641 |
|
Selected interest rates and ratios: |
|
|
|
||||
Composite interest rate(1) |
|
3.77 |
% |
|
|
3.07 |
% |
Composite interest rate on fixed-rate debt(1) |
|
3.26 |
% |
|
|
2.98 |
% |
Percentage of total debt at a fixed-rate |
|
84.71 |
% |
|
|
91.34 |
% |
|
|
|
|
||||
(1) This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs. |
|||||||
Conference Call
In connection with this earnings release, Air Lease Corporation will host a conference call on February 15, 2024 at 4:30 PM Eastern Time to discuss the Company's financial results for the fourth quarter and year ended 2023.
Investors can participate in the conference call by dialing 1 (888) 660-6652 domestic or 1 (646) 960-0554 international. The passcode for the call is 5952437.
The conference call will also be broadcast live through a link on the Investors page of the Air Lease Corporation website at www.airleasecorp.com. Please visit the website at least 15 minutes prior to the call to register, download and install any necessary audio software. A replay of the broadcast will be available on the Investors page of the Air Lease Corporation website.
For your convenience, the conference call can be replayed in its entirety beginning on February 15, 2024 until 11:59 PM ET on February 22, 2024. If you wish to listen to the replay of this conference call, please dial 1 (800) 770-2030 domestic or 1 (647) 362-9199 international and enter passcode 5952437.
About Air Lease Corporation (NYSE: AL)
Air Lease Corporation is a leading global aircraft leasing company based in
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this press release and include statements regarding, among other matters, the state of the airline industry, our access to the capital and debt markets, the impact of Russia’s invasion of
- our inability to obtain additional capital on favorable terms, or at all, to acquire aircraft, service our debt obligations and refinance maturing debt obligations;
- increases in our cost of borrowing, decreases in our credit ratings, or changes in interest rates;
- our inability to generate sufficient returns on our aircraft investments through strategic acquisition and profitable leasing;
- the failure of an aircraft or engine manufacturer to meet its contractual obligations to us, including or as a result of manufacturing defects and technical or other difficulties with aircraft or engines before or after delivery;
-
our ability to recover losses related to aircraft detained in
Russia , including through insurance claims and related litigation; - obsolescence of, or changes in overall demand for, our aircraft;
- changes in the value of, and lease rates for, our aircraft, including as a result of aircraft oversupply, manufacturer production levels, our lessees’ failure to maintain our aircraft, inflation, and other factors outside of our control;
- impaired financial condition and liquidity of our lessees, including due to lessee defaults and reorganizations, bankruptcies or similar proceedings;
- increased competition from other aircraft lessors;
- the failure by our lessees to adequately insure our aircraft or fulfill their contractual indemnity obligations to us, or the failure of such insurers to fulfill their contractual obligations;
- increased tariffs and other restrictions on trade;
- changes in the regulatory environment, including changes in tax laws and environmental regulations;
- other events affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, such as the threat or realization of epidemic diseases, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors; and
- any additional factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2023, and other Securities and Exchange Commission (“SEC”) filings, including future SEC filings.
All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations. You are therefore cautioned not to place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not intend and undertake no obligation to update any forward-looking information to reflect actual results or events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Air Lease Corporation and Subsidiaries |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, except share and par value amounts) |
|||||||
|
December 31, 2023 |
|
December 31, 2022 |
||||
|
(unaudited) |
||||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
460,870 |
|
|
$ |
766,418 |
|
Restricted cash |
|
3,622 |
|
|
|
13,599 |
|
Flight equipment subject to operating leases |
|
31,787,241 |
|
|
|
29,466,888 |
|
Less accumulated depreciation |
|
(5,556,033 |
) |
|
|
(4,928,503 |
) |
|
|
26,231,208 |
|
|
|
24,538,385 |
|
Deposits on flight equipment purchases |
|
1,203,068 |
|
|
|
1,344,973 |
|
Other assets |
|
2,553,484 |
|
|
|
1,733,330 |
|
Total assets |
$ |
30,452,252 |
|
|
$ |
28,396,705 |
|
Liabilities and Shareholders’ Equity |
|
|
|
||||
Accrued interest and other payables |
$ |
1,164,140 |
|
|
$ |
696,899 |
|
Debt financing, net of discounts and issuance costs |
|
19,182,657 |
|
|
|
18,641,063 |
|
Security deposits and maintenance reserves on flight equipment leases |
|
1,519,719 |
|
|
|
1,293,929 |
|
Rentals received in advance |
|
143,861 |
|
|
|
147,654 |
|
Deferred tax liability |
|
1,281,837 |
|
|
|
970,797 |
|
Total liabilities |
$ |
23,292,214 |
|
|
$ |
21,750,342 |
|
Shareholders’ Equity |
|
|
|
||||
Preferred Stock, |
$ |
106 |
|
|
$ |
106 |
|
Class A common stock, |
|
1,110 |
|
|
|
1,109 |
|
Class B Non-Voting common stock, |
|
— |
|
|
|
— |
|
Paid-in capital |
|
3,287,234 |
|
|
|
3,255,973 |
|
Retained earnings |
|
3,869,813 |
|
|
|
3,386,820 |
|
Accumulated other comprehensive income |
|
1,775 |
|
|
|
2,355 |
|
Total shareholders’ equity |
$ |
7,160,038 |
|
|
$ |
6,646,363 |
|
Total liabilities and shareholders’ equity |
$ |
30,452,252 |
|
|
$ |
28,396,705 |
|
Air Lease Corporation and Subsidiaries |
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands, except share, per share amounts and percentages) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
||||||||
Rental of flight equipment |
|
$ |
644,074 |
|
|
$ |
561,285 |
|
|
$ |
2,477,607 |
|
|
$ |
2,214,508 |
|
Aircraft sales, trading and other |
|
|
72,494 |
|
|
|
40,325 |
|
|
|
207,370 |
|
|
|
102,794 |
|
Total revenues |
|
|
716,568 |
|
|
|
601,610 |
|
|
|
2,684,977 |
|
|
|
2,317,302 |
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses |
|
|
|
|
|
|
|
|
||||||||
Interest |
|
|
169,355 |
|
|
|
134,303 |
|
|
|
654,910 |
|
|
|
492,924 |
|
Amortization of debt discounts and issuance costs |
|
|
13,639 |
|
|
|
13,482 |
|
|
|
54,053 |
|
|
|
53,254 |
|
Interest expense |
|
|
182,994 |
|
|
|
147,785 |
|
|
|
708,963 |
|
|
|
546,178 |
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation of flight equipment |
|
|
273,113 |
|
|
|
252,860 |
|
|
|
1,068,772 |
|
|
|
965,955 |
|
Write-off of Russian fleet, net of (recoveries) |
|
|
(67,022 |
) |
|
|
(30,877 |
) |
|
|
(67,022 |
) |
|
|
771,476 |
|
Selling, general and administrative |
|
|
49,798 |
|
|
|
45,862 |
|
|
|
186,015 |
|
|
|
156,855 |
|
Stock-based compensation expense |
|
|
11,285 |
|
|
|
5,804 |
|
|
|
34,615 |
|
|
|
15,603 |
|
Total expenses |
|
|
450,168 |
|
|
|
421,434 |
|
|
|
1,931,343 |
|
|
|
2,456,067 |
|
Income/(loss) before taxes |
|
|
266,400 |
|
|
|
180,176 |
|
|
|
753,634 |
|
|
|
(138,765 |
) |
Income tax (expense)/benefit |
|
|
(45,349 |
) |
|
|
(34,865 |
) |
|
|
(139,012 |
) |
|
|
41,741 |
|
Net income/(loss) |
|
$ |
221,051 |
|
|
$ |
145,311 |
|
|
$ |
614,622 |
|
|
$ |
(97,024 |
) |
Preferred stock dividends |
|
|
(10,425 |
) |
|
|
(10,425 |
) |
|
|
(41,700 |
) |
|
|
(41,700 |
) |
Net income/(loss) attributable to common stockholders |
|
$ |
210,626 |
|
|
$ |
134,886 |
|
|
$ |
572,922 |
|
|
$ |
(138,724 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Earnings/(Loss) per share of common stock: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
1.90 |
|
|
$ |
1.22 |
|
|
$ |
5.16 |
|
|
$ |
(1.24 |
) |
Diluted |
|
$ |
1.89 |
|
|
$ |
1.21 |
|
|
$ |
5.14 |
|
|
$ |
(1.24 |
) |
Weighted-average shares of common stock outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
111,027,252 |
|
|
|
110,892,097 |
|
|
|
111,005,088 |
|
|
|
111,626,508 |
|
Diluted |
|
|
111,410,767 |
|
|
|
111,162,063 |
|
|
|
111,438,589 |
|
|
|
111,626,508 |
|
|
|
|
|
|
|
|
|
|
||||||||
Other financial data |
|
|
|
|
|
|
|
|
||||||||
Pre-tax margin |
|
|
37.2 |
% |
|
|
29.9 |
% |
|
|
28.1 |
% |
|
|
(6.0 |
)% |
Pre-tax return on common equity (trailing twelve months) |
|
|
11.8 |
% |
|
|
(3.0 |
)% |
|
|
11.8 |
% |
|
|
(3.0 |
)% |
Adjusted net income before income taxes(1) |
|
$ |
213,877 |
|
|
$ |
158,160 |
|
|
$ |
733,580 |
|
|
$ |
659,868 |
|
Adjusted diluted earnings per share before income taxes(1) |
|
$ |
1.92 |
|
|
$ |
1.42 |
|
|
$ |
6.58 |
|
|
$ |
5.89 |
|
Adjusted pre-tax margin(1) |
|
|
29.8 |
% |
|
|
26.3 |
% |
|
|
27.3 |
% |
|
|
28.5 |
% |
Adjusted pre-tax return on common equity (trailing twelve months)(1) |
|
|
12.1 |
% |
|
|
11.0 |
% |
|
|
12.1 |
% |
|
|
11.0 |
% |
(1) |
Adjusted net income before income taxes (defined as net income/(loss) attributable to common stockholders excluding the effects of certain non-cash items, one-time or non-recurring items, such as net write-offs and recoveries of our Russian fleet, that are not expected to continue in the future and certain other items), adjusted pre-tax margin (defined as adjusted net income before income taxes divided by total revenues), adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) and adjusted pre-tax return on common equity (defined as adjusted net income before income taxes divided by average common shareholders' equity) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income/(loss) attributable to common stockholders, pre-tax margin, earnings/(loss) per share, diluted earnings/(loss) per share and pre-tax return on common equity, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations. |
|
|
|
|
|
Management and our board of directors use adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity to assess our consolidated financial and operating performance. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash items, one-time or non-recurring items that are not expected to continue in the future and certain other items from our operating results. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity, however, should not be considered in isolation or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity do not reflect our cash expenditures or changes in our cash requirements for our working capital needs. In addition, our calculation of adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity may differ from the adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity or analogous calculations of other companies in our industry, limiting their usefulness as a comparative measure. |
|
|
|
|
|
The following table shows the reconciliation of the numerator for adjusted pre-tax margin (in thousands, except percentages): |
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
||||||||||||||
Reconciliation of the numerator for adjusted pre-tax margin (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): |
|
|
|
|
|
|
|
||||||||
Net income/(loss) attributable to common stockholders |
$ |
210,626 |
|
|
$ |
134,886 |
|
|
$ |
572,922 |
|
|
$ |
(138,724 |
) |
Amortization of debt discounts and issuance costs |
|
13,639 |
|
|
|
13,482 |
|
|
|
54,053 |
|
|
|
53,254 |
|
Write-off of Russian fleet, net of (recoveries) |
|
(67,022 |
) |
|
|
(30,877 |
) |
|
|
(67,022 |
) |
|
|
771,476 |
|
Stock-based compensation expense |
|
11,285 |
|
|
|
5,804 |
|
|
|
34,615 |
|
|
|
15,603 |
|
Income tax expense/(benefit) |
|
45,349 |
|
|
|
34,865 |
|
|
|
139,012 |
|
|
|
(41,741 |
) |
Adjusted net income before income taxes |
$ |
213,877 |
|
|
$ |
158,160 |
|
|
$ |
733,580 |
|
|
$ |
659,868 |
|
|
|
|
|
|
|
|
|
||||||||
Denominator for adjusted pre-tax margin: |
|
|
|
|
|
||||||||||
Total revenues |
$ |
716,568 |
|
|
$ |
601,610 |
|
|
$ |
2,684,977 |
|
|
$ |
2,317,302 |
|
Adjusted pre-tax margin(a) |
|
29.8 |
% |
|
|
26.3 |
% |
|
|
27.3 |
% |
|
|
28.5 |
% |
|
|
|
|
|
|
|
|
||||||||
(a) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues |
|||||||||||||||
The following table shows the reconciliation of the numerator for adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts): |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
||||||||||||||
Reconciliation of the numerator for adjusted diluted earnings per share (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): |
|
|
|
|
|
|
|
||||||||
Net income/(loss) attributable to common stockholders |
$ |
210,626 |
|
|
$ |
134,886 |
|
|
$ |
572,922 |
|
|
$ |
(138,724 |
) |
Amortization of debt discounts and issuance costs |
|
13,639 |
|
|
|
13,482 |
|
|
|
54,053 |
|
|
|
53,254 |
|
Write-off of Russian fleet, net of (recoveries) |
|
(67,022 |
) |
|
|
(30,877 |
) |
|
|
(67,022 |
) |
|
|
771,476 |
|
Stock-based compensation expense |
|
11,285 |
|
|
|
5,804 |
|
|
|
34,615 |
|
|
|
15,603 |
|
Income tax expense/(benefit) |
|
45,349 |
|
|
|
34,865 |
|
|
|
139,012 |
|
|
|
(41,741 |
) |
Adjusted net income before income taxes |
$ |
213,877 |
|
|
$ |
158,160 |
|
|
$ |
733,580 |
|
|
$ |
659,868 |
|
|
|
|
|
|
|
|
|
||||||||
Denominator for adjusted diluted earnings per share: |
|
|
|
|
|
|
|
||||||||
Weighted-average diluted common shares outstanding |
|
111,410,767 |
|
|
|
111,162,063 |
|
|
|
111,438,589 |
|
|
|
111,626,508 |
|
Potentially dilutive securities, whose effect would have been anti-dilutive |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
361,186 |
|
Adjusted weighted-average diluted common shares outstanding |
|
111,410,767 |
|
|
|
111,162,063 |
|
|
|
111,438,589 |
|
|
|
111,987,694 |
|
Adjusted diluted earnings per share before income taxes(b) |
$ |
1.92 |
|
|
$ |
1.42 |
|
|
$ |
6.58 |
|
|
$ |
5.89 |
|
|
|
|
|
|
|
|
|
||||||||
(b) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by adjusted weighted-average diluted common shares outstanding |
|||||||||||||||
The following table shows the reconciliation of pre-tax return on common equity to adjusted pre-tax return on common equity (in thousands, except percentages): |
|||||||
|
|
||||||
|
Year Ended
|
||||||
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
||||||
Reconciliation of the numerator for adjusted pre-tax return on common equity (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): |
|
|
|
||||
Net income/(loss) attributable to common stockholders |
$ |
572,922 |
|
|
$ |
(138,724 |
) |
Amortization of debt discounts and issuance costs |
|
54,053 |
|
|
|
53,254 |
|
Write-off of Russian fleet, net of (recoveries) |
|
(67,022 |
) |
|
|
771,476 |
|
Stock-based compensation expense |
|
34,615 |
|
|
|
15,603 |
|
Income tax expense/(benefit) |
|
139,012 |
|
|
|
(41,741 |
) |
Adjusted net income before income taxes |
$ |
733,580 |
|
|
$ |
659,868 |
|
|
|
|
|
||||
Reconciliation of denominator for pre-tax return on common equity to adjusted pre-tax return on common equity: |
|
|
|
||||
Common shareholders' equity as of beginning of the period |
$ |
5,796,363 |
|
|
$ |
6,158,568 |
|
Common shareholders' equity as of end of the period |
$ |
6,310,038 |
|
|
$ |
5,796,363 |
|
Average common shareholders' equity |
$ |
6,053,201 |
|
|
$ |
5,977,466 |
|
|
|
|
|
||||
Adjusted pre-tax return on common equity(c) |
|
12.1 |
% |
|
|
11.0 |
% |
|
|
|
|
||||
(c) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity |
|||||||
Air Lease Corporation and Subsidiaries |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In thousands) |
|||||||
|
Year Ended
|
||||||
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
||||||
Operating Activities |
|
|
|
||||
Net income/(loss) |
$ |
614,622 |
|
|
$ |
(97,024 |
) |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: |
|
|
|
||||
Depreciation of flight equipment |
|
1,068,772 |
|
|
|
965,955 |
|
Write-off of Russian fleet, net of (recoveries) |
|
(67,022 |
) |
|
|
771,476 |
|
Stock-based compensation expense |
|
34,615 |
|
|
|
15,603 |
|
Deferred taxes |
|
133,358 |
|
|
|
(43,492 |
) |
Amortization of prepaid lease costs |
|
75,389 |
|
|
|
47,849 |
|
Amortization of discounts and debt issuance costs |
|
54,053 |
|
|
|
53,254 |
|
Gain on aircraft sales, trading and other activity |
|
(226,945 |
) |
|
|
(113,103 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Other assets |
|
48,310 |
|
|
|
(232,613 |
) |
Accrued interest and other payables |
|
13,333 |
|
|
|
255 |
|
Rentals received in advance |
|
(1,605 |
) |
|
|
13,990 |
|
Net cash provided by operating activities |
|
1,746,880 |
|
|
|
1,382,150 |
|
Investing Activities |
|
|
|
||||
Acquisition of flight equipment under operating lease |
|
(3,789,113 |
) |
|
|
(2,904,723 |
) |
Payments for deposits on flight equipment purchases |
|
(433,452 |
) |
|
|
(518,270 |
) |
Proceeds from aircraft sales, trading and other activity |
|
1,684,814 |
|
|
|
235,424 |
|
Proceeds from settlement of insurance claim |
|
64,714 |
|
|
|
— |
|
Acquisition of aircraft furnishings, equipment and other assets |
|
(305,346 |
) |
|
|
(216,635 |
) |
Net cash used in investing activities |
|
(2,778,383 |
) |
|
|
(3,404,204 |
) |
Financing Activities |
|
|
|
||||
Cash dividends paid on Class A common stock |
|
(88,792 |
) |
|
|
(83,253 |
) |
Common shares repurchased |
|
— |
|
|
|
(150,000 |
) |
Cash dividends paid on preferred stock |
|
(41,700 |
) |
|
|
(41,700 |
) |
Tax withholdings on stock-based compensation |
|
(3,354 |
) |
|
|
(8,903 |
) |
Net change in unsecured revolving facility |
|
80,000 |
|
|
|
1,020,000 |
|
Proceeds from debt financings |
|
2,993,732 |
|
|
|
2,659,996 |
|
Payments in reduction of debt financings |
|
(2,593,338 |
) |
|
|
(2,085,898 |
) |
Debt issuance costs |
|
(13,052 |
) |
|
|
(6,827 |
) |
Security deposits and maintenance reserve receipts |
|
398,345 |
|
|
|
417,224 |
|
Security deposits and maintenance reserve disbursements |
|
(15,863 |
) |
|
|
(26,860 |
) |
Net cash provided by financing activities |
|
715,978 |
|
|
|
1,693,779 |
|
Net (decrease)/increase in cash |
|
(315,525 |
) |
|
|
(328,275 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
780,017 |
|
|
|
1,108,292 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
464,492 |
|
|
$ |
780,017 |
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
||||
Cash paid during the period for interest, including capitalized interest of |
$ |
693,826 |
|
|
$ |
533,897 |
|
Cash paid for income taxes |
$ |
7,801 |
|
|
$ |
6,362 |
|
Supplemental Disclosure of Noncash Activities |
|
|
|
||||
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment and other assets |
$ |
827,377 |
|
|
$ |
914,501 |
|
Flight equipment subject to operating leases reclassified to flight equipment held for sale |
$ |
1,730,212 |
|
|
$ |
377,131 |
|
Flight equipment subject to operating leases reclassified to investment in sales-type lease |
$ |
66,907 |
|
|
$ |
255,205 |
|
Cash dividends declared on Class A common stock, not yet paid |
$ |
23,316 |
|
|
$ |
22,178 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240214543566/en/
Investors:
Jason Arnold
Vice President, Investor Relations
Email: investors@airleasecorp.com
Media:
Laura Woeste
Senior Manager, Media and Investor Relations
Email: press@airleasecorp.com
Ashley Arnold
Senior Manager, Media and Investor Relations
Email: press@airleasecorp.com
Source: Air Lease Corporation
FAQ
What was the net income for Air Lease Corporation in Q4 2023?
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What was the total assets figure for Air Lease Corporation in 2023?
What is the forward orderbook amount for Air Lease Corporation?
What is the commercial aircraft supply/demand outlook for Air Lease Corporation?
